Regulatory affairs

European Union Regulation

The sovereign ratings of the Economist Intelligence Unit's Country Risk Service are regulated in accordance with Regulation (EC) No 1060/2009 of 16 September 2009, on credit rating agencies, as amended by Regulation (EU) No. 513/2011 of the European Parliament and of the Council of May 11, 2011 (hereinafter called EU Regulations). The registration of the Economist Intelligence Unit as a credit rating agency took effect from 3 June 2013.

Notifications

28 December 2016
The EIU has published its Country Risk Service rating schedule for 2017.

17 June 2016
The EIU has published its Transparency Report for financial year 2015-16, available here.

2 June 2016
The EIU has updated its disclosure on Ancillary Services

See all notifications

Ratings scope and criteria

• The EIU will assign only unsolicited ratings, i.e. ratings which are not initiated at the request of rated entity.
• The Economist Intelligence Unit will base its sovereign ratings and other ratings solely on information in the public domain.
• The EIU will assign a rating only when it deems that there is sufficient information in the public domain on which to base the rating.
• Sovereigns rated by the Country Risk Service (CRS) do not participate in the credit rating process.

Attributes and limitations of the ratings

The scores and ratings assigned by the EIU are opinions on the creditworthiness of governments based on models using standardised indicators and methodologies. The indicators used in assessing sovereign risk are both qualitative and quantitative. The EIU takes care to ensure standardised measurement of qualitative criteria, but they inevitably involve an element of subjectivity. Quantitative indicators are drawn from recognised sources. They are based on actual data where high-frequency data series are available. For annual data series, the EIU makes estimates based on the outturn or estimate for the previous year and its forecast for the current year. The scores and ratings are point-in-time, i.e. they take into account the point of the economic cycle.

The EIU back-tested the model against a data base of sovereign defaults and publishes the incidence of default by score ranges. Statistical validation is difficult because of the scarcity of past episodes of sovereign default. This means that probabilities of default based on past experience may not necessarily be a reliable guide to the future.

Methodology, ratings definitions and sources

The Economist Intelligence Unit’s methodology is described in the Country Risk Service Handbook.

We list the indicators and weightings for calculating our sovereign risk scores here.

Effective date	Cessation date
January 2014 (PDF)	Current
March 2010 (PDF)	Replaced January 2014

Publication schedule

The Country Risk Service rating schedule lists the dates updated sovereign ratings and accompanying reports may be published, and the date when a country was first rated.

The Country Risk Service published ratings information page lists the lead analyst, analyst and publication date and time for each sovereign rating and accompanying report.

Disclosures

The following disclosures are provided in accordance with the requirements of the EU Regulations governing credit rating agencies.

Conflicts of interest

Policies relating to conflicts of interests, and any identified conflicts of interest.

A list of rated entities and related third parties that subscribe to EIU services.

Ancillary services

A description of the ancillary services provided by the EIU.

Publication of credit ratings

The policy relating to the publication of credit ratings and other related communications.

Methodologies and procedures

Information relating to the Economist Intelligence Unit’s methodologies and procedures for assigning ratings.

Material modifications

Material modifications of the Economist Intelligence Unit’s systems, resources or procedures will be announced within the Notifications section of this page. As necessary, these modifications will be reflected through updates of the Disclosure documents referenced within this page.

Compensation policy

The policy relating to compensation.

Transparency report

A transparency report containing information on the legal structure and ownership of The Economist Intelligence Unit Ltd, a description of the internal control mechanisms ensuring the quality of The Economist Intelligence Unit’s ratings and other information is available here.